How ARM licenses it's IP for production

Part 2: Royalties and Physical IP make for a complex brew

by Charlie Demerjian
SemiAccurate (Aug 8, 2013)

The up front licensing costs are actually the simplest part of the story, from here it gets a little tricky. Given the 6-24 months ARM says it typically takes to negotiate a licensing deal you can probably guess that they are pretty comprehensive. Picking which type of license you want to buy is the work of an afternoon, once you get the lawyers involved things slow down. A lot. The complexities start out with the royalties, and this area is where ARM makes most of its income.

The license types just get you a design, actually making silicon that contains the cores in question involves royalty payments to ARM for each device sold. These are typically 1-2% of the selling price of the end chip or SoC but ARM has indicated that the V8 class chips will raise this a bit. That means the A53 and A57 will have a maximum royalty rate of 2.5% and likely a higher minimum too but both numbers can vary a lot within some rough guidelines

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